[Motorola Milestone Android Development] tiger2wander:
Try this:

assert(getprop("ro.product.device") == "umts_sholes" ||
getprop("ro.build.product") == "umts_sholes");
unmount("/system");
show_progress(0.500000, 0);
format("yaffs2", "MTD", "system");
mount("yaffs2", "MTD", "system", "/system");
show_progress(0.500000, 40);
package_extract_dir("system", "/system");
symlink("busybox", "/system/xbin/[", "/system/xbin/[[",
"/system/xbin/arp", "/system/xbin/ash", "/system/xbin/awk",
"/system/xbin/base64", "/system/xbin/basename", "/system/xbin/bbconfig",
"/system/xbin/blockdev", "/system/xbin/brctl", "/system/xbin/bunzip2",
"/system/xbin/bzcat", "/system/xbin/bzip2", "/system/xbin/cal",
"/system/xbin/cat", "/system/xbin/catv", "/system/xbin/chattr",
"/system/xbin/chgrp", "/system/xbin/chmod", "/system/xbin/chown",
"/system/xbin/chroot", "/system/xbin/clear", "/system/xbin/cmp",
"/system/xbin/comm", "/system/xbin/cp", "/system/xbin/cpio",
"/system/xbin/crond", "/system/xbin/crontab", "/system/xbin/cut",
"/system/xbin/date", "/system/xbin/dc", "/system/xbin/dd",
"/system/xbin/depmod", "/system/xbin/devmem", "/system/xbin/df",
"/system/xbin/diff", "/system/xbin/dirname", "/system/xbin/dmesg",
"/system/xbin/dnsd", "/system/xbin/dos2unix", "/system/xbin/du",
"/system/xbin/echo", "/system/xbin/ed", "/system/xbin/egrep",
"/system/xbin/env", "/system/xbin/expand", "/system/xbin/expr",
"/system/xbin/false", "/system/xbin/fdisk", "/system/xbin/fgrep",
"/system/xbin/find", "/system/xbin/flash_lock",
"/system/xbin/flash_unlock", "/system/xbin/flashcp",
"/system/xbin/flock", "/system/xbin/fold", "/system/xbin/free",
"/system/xbin/freeramdisk", "/system/xbin/fsync", "/system/xbin/ftpget",
"/system/xbin/ftpput", "/system/xbin/fuser", "/system/xbin/getopt",
"/system/xbin/grep", "/system/xbin/groups", "/system/xbin/gunzip",
"/system/xbin/gzip", "/system/xbin/halt", "/system/xbin/head",
"/system/xbin/hexdump", "/system/xbin/id", "/system/xbin/ifconfig",
"/system/xbin/insmod", "/system/xbin/install", "/system/xbin/iostat",
"/system/xbin/ip", "/system/xbin/kill", "/system/xbin/killall",
"/system/xbin/killall5", "/system/xbin/length", "/system/xbin/less",
"/system/xbin/ln", "/system/xbin/losetup", "/system/xbin/ls",
"/system/xbin/lsattr", "/system/xbin/lsmod", "/system/xbin/lsusb",
"/system/xbin/lzcat", "/system/xbin/lzma", "/system/xbin/lzop",
"/system/xbin/lzopcat", "/system/xbin/man", "/system/xbin/md5sum",
"/system/xbin/mesg", "/system/xbin/mkdir", "/system/xbin/mke2fs",
"/system/xbin/mkfifo", "/system/xbin/mkfs.ext2",
"/system/xbin/mkfs.vfat", "/system/xbin/mknod", "/system/xbin/mkswap",
"/system/xbin/mktemp", "/system/xbin/modinfo", "/system/xbin/modprobe",
"/system/xbin/more", "/system/xbin/mount", "/system/xbin/mountpoint",
"/system/xbin/mpstat", "/system/xbin/mv", "/system/xbin/nanddump",
"/system/xbin/nandwrite", "/system/xbin/netstat", "/system/xbin/nice",
"/system/xbin/nohup", "/system/xbin/nslookup", "/system/xbin/ntpd",
"/system/xbin/od", "/system/xbin/patch", "/system/xbin/pgrep",
"/system/xbin/pidof", "/system/xbin/ping", "/system/xbin/pkill",
"/system/xbin/pmap", "/system/xbin/poweroff", "/system/xbin/printenv",
"/system/xbin/printf", "/system/xbin/ps", "/system/xbin/pstree",
"/system/xbin/pwd", "/system/xbin/pwdx", "/system/xbin/rdev",
"/system/xbin/readlink", "/system/xbin/realpath", "/system/xbin/renice",
"/system/xbin/reset", "/system/xbin/resize", "/system/xbin/rev",
"/system/xbin/rm", "/system/xbin/rmdir", "/system/xbin/rmmod",
"/system/xbin/route", "/system/xbin/run-parts", "/system/xbin/rx",
"/system/xbin/sed", "/system/xbin/seq", "/system/xbin/setconsole",
"/system/xbin/setserial", "/system/xbin/setsid", "/system/xbin/sh",
"/system/xbin/sha1sum", "/system/xbin/sha256sum",
"/system/xbin/sha512sum", "/system/xbin/sleep", "/system/xbin/sort",
"/system/xbin/split", "/system/xbin/stat", "/system/xbin/strings",
"/system/xbin/stty", "/system/xbin/sum", "/system/xbin/swapoff",
"/system/xbin/swapon", "/system/xbin/sync", "/system/xbin/sysctl",
"/system/xbin/tac", "/system/xbin/tail", "/system/xbin/tar",
"/system/xbin/tee", "/system/xbin/telnet", "/system/xbin/telnetd",
"/system/xbin/test", "/system/xbin/tftp", "/system/xbin/tftpd",
"/system/xbin/time", "/system/xbin/timeout", "/system/xbin/top",
"/system/xbin/touch", "/system/xbin/tr", "/system/xbin/traceroute",
"/system/xbin/true", "/system/xbin/ttysize", "/system/xbin/tune2fs",
"/system/xbin/umount", "/system/xbin/uname", "/system/xbin/uncompress",
"/system/xbin/unexpand", "/system/xbin/uniq", "/system/xbin/unix2dos",
"/system/xbin/unlzma", "/system/xbin/unlzop", "/system/xbin/unxz",
"/system/xbin/unzip", "/system/xbin/uptime", "/system/xbin/usleep",
"/system/xbin/uudecode", "/system/xbin/uuencode", "/system/xbin/vi",
"/system/xbin/watch", "/system/xbin/wc", "/system/xbin/wget",
"/system/xbin/which", "/system/xbin/whoami", "/system/xbin/xargs",
"/system/xbin/xz", "/system/xbin/xzcat", "/system/xbin/yes",
"/system/xbin/zcat");
symlink("toolbox", "/system/bin/cat", "/system/bin/cmp",
"/system/bin/date", "/system/bin/dd", "/system/bin/dmesg",
"/system/bin/getevent", "/system/bin/getprop", "/system/bin/hd",
"/system/bin/id", "/system/bin/ifconfig", "/system/bin/iftop",
"/system/bin/insmod", "/system/bin/ioctl", "/system/bin/ionice",
"/system/bin/kill", "/system/bin/log", "/system/bin/lsmod",
"/system/bin/nandread", "/system/bin/netstat",
"/system/bin/newfs_msdos", "/system/bin/notify", "/system/bin/printenv",
"/system/bin/ps", "/system/bin/reboot", "/system/bin/renice",
"/system/bin/rmdir", "/system/bin/rmmod", "/system/bin/route",
"/system/bin/schedtop", "/system/bin/sendevent",
"/system/bin/setconsole", "/system/bin/setprop", "/system/bin/sleep",
"/system/bin/smd", "/system/bin/start", "/system/bin/stop",
"/system/bin/sync", "/system/bin/top", "/system/bin/uptime",
"/system/bin/vmstat", "/system/bin/watchprops",
"/system/bin/wipe");
set_perm_recursive(0, 0, 0755, 0644, "/system");
set_perm_recursive(0, 2000, 0755, 0755, "/system/bin");
set_perm(0, 3003, 02750, "/system/bin/netcfg");
set_perm(0, 3004, 02755, "/system/bin/ping");
set_perm(0, 2000, 06750, "/system/bin/run-as");
set_perm_recursive(1002, 1002, 0755, 0440, "/system/etc/bluetooth");
set_perm(0, 0, 0755, "/system/etc/bluetooth");
set_perm(1000, 1000, 0640, "/system/etc/bluetooth/auto_pairing.conf");
set_perm(3002, 3002, 0444, "/system/etc/bluetooth/blacklist.conf");
set_perm(1002, 1002, 0440, "/system/etc/dbus.conf");
set_perm(1014, 2000, 0550, "/system/etc/dhcpcd/dhcpcd-run-hooks");
set_perm_recursive(0, 2000, 0755, 0750, "/system/etc/init.d");
set_perm(0, 0, 0755, "/system/etc/init.d");
set_perm(0, 2000, 0550, "/system/etc/init.goldfish.sh");
set_perm_recursive(0, 0, 0755, 0555, "/system/etc/ppp");
set_perm_recursive(0, 2000, 0755, 0755, "/system/xbin");
set_perm(0, 0, 06755, "/system/xbin/apply_firewall");
set_perm(0, 0, 06755, "/system/xbin/apply_theme");
set_perm(0, 0, 06755, "/system/xbin/dumplog");
set_perm(0, 0, 06755, "/system/xbin/librank");
set_perm(0, 0, 06755, "/system/xbin/mv2sd");
set_perm(0, 0, 06755, "/system/xbin/ota");
set_perm(0, 0, 06755, "/system/xbin/procmem");
set_perm(0, 0, 06755, "/system/xbin/procrank");
set_perm(0, 0, 06755, "/system/xbin/run_as");
set_perm(0, 0, 06755, "/system/xbin/su");
show_progress(0.200000, 0);
show_progress(0.200000, 10);
[B]
unmount("/system");

unmount("/data");
show_progress(0.100000, 0);

format("yaffs2", "MTD", "data");
mount("yaffs2", "MTD", "data", "/data");

package_extract_dir("system", "/system");
set_perm(0, 0, 0655, 0655, "/data");
unmount("/data");
show_progress(0.200000, 10);[/B]

assert(package_extract_file("boot.img", "/tmp/boot.img"),
write_raw_image("/tmp/boot.img", "boot"),
delete("/tmp/boot.img"));

Note: you should verify that data folder is included inside update.x.x.x.zip package, I think there are some error with write raw image: boot.img, so keep it last thing to do.

G00d luck!

By the way, Great to see dev job for Milestone's MIUI

Strong day!